Home Equity Loan setup

[Bill Cummens]

Hello Michael,
Let me first state that I am NOT a financial guy, so I apologize if my questions are basic. This is a 10 yr fixed loan.  I am looking at my Disclosure Statement paperwork that I signed at the time of the loan.  The last page (Net Settlement) shows:
Loan Amount:							100,000.00
Minus Total Settlement Charges:			     1500.00
Minus Total Disbursements to Others:		50,000.00
Equals Total Disbursements to Borrower:	48,500.00

The $48.5k is what was deposited into my account. Will the interest be on a $51,500 loan amount? The Amortization Schedule they gave me shows $100k as the opening balance so I guess that answers the previous question.

My questions are… what are the buttons I push to set it up?
Do I go to: Actions > Scheduled Transactions > Mortgage and Loan Repayment… to set it up?
How do I include the Settlement and Disbursement deductions?
Does the principle go to Mortgage and the interest go to Interest, or should I create Mortgage:XYZ Bank and Interest:XYZ Bank accounts?
Can I print out an Amortization Schedule in Gnucash?
If it is set up as a Scheduled Transaction, will Gnucash change the Principle and Interest amounts based on the Amortization Schedule?

Regards,
Bill
On Jul 19, 2013, at 5:29 PM, Mike or Penny Novack <stepbystepfarm at mtdata.com> wrote:

> Bill wrote:
> 
>> Hello Gnucast support,
>> I am a new user to GnuCash. I am having trouble setting up a Home Eq. loan. I've tried following the example in the Help manual but it didn't come out right.
>> I have a $100.000 loan out of which there are deductions of $1500 in service fees and a $50,000 disbursement to pay off another loan. This leaves me with a $48,500 loan at 3.15%. How do I set this up? Each time, as I enter in my monthly payment, will it automatically decrement the interest portion and increase the principle portion?
>> Thank you in advance for your help.
>> 
>> Best regards,
>> Bill
>> 
> Except the USUAL way a home equity loan is used (at least in its early years) is much too flexible for anything automatic to be useful. Generally after a certain period where the loan is in effect a "line of credit" it may become a fixed loan and you can no longer increase the amount taken out, only pay it off, and THEN automation may be useful. Are you saying that you have ALREADY maxed out the line of credit?  You say that you have taken out a loan for $100,000 (that's the line of credit amount) and of that you have used 51,500 (paying off that other loan and the service fees).
> 
> That does NOT mean you have a 48,500 loan. The 48,500 is the amount of credit remaining. At present you have a 51,500 loan.
> 
> Each month you will get a statement showing any amounts borrowed and any principle paid off and the amount of interest owed on the balance. Generally with a home equity loan, during the flexible period, you only HAVE to pay that interest. You SHOULD also pay down the principle, but the amount would depend on your funds that month.
> 
> Michael